5/29/12

Bill Patton's Harvard Business Review Comments

Harvard Business Review

HBR online pieces frequently have interesting comments and discussions at the end of the article. These are some of my contributions.

Years ago i was given a simple piece of advice regarding culture that i've used to evaluate organizational cultures again and again - particularly with respect to potential mergers or strategic alliances.

"Look down". For some strange reason, shoes tell a lot. Are you wearing chuck t's while your interviewer is wearing manolo blahnik's? Are the senior managers for your acquisition prospect wearing flip flops while the parent company staff are all wearing florsheims?

In my case I learned long ago that I don't fit in corporate cultures that feature heels and fancy footwear. Give me sanuks and a good cup of coffee and i'm good to go...

Personally... I found this post terrifying. As the founder of a small .com startup I've built my entire business around the google concept of "launch early and iterate often" which strikes me as an executional version of the "MVP" concept. Here are (a few of the things) that keep me up at night while following this approach:

1. If I launch an unprotected or unprotectable idea (IP protection) that is barely good enough then I've essentially given any competitor who is paying attention a blue print for what they need to do to beat me. At my own game. Without having to come up with the darn idea in the first place.

2. If I launch a well intentioned but unstable or frustratingly slow product to market - my early adopters' user experience will be poor - which unfortunately becomes part of my brand's reputation. Even after I manage to improve my product, I'll have a hard time wooing customers back (witness my aversion to purchasing a hyundai car for instance...) - I've witnessed this first hand with logsitall.

So while I agree with the concept in principle (and have been living it in effect) I'm still a bit envious of those folks who manage to come up with a buttoned up, patent protected, perfectly crafted, tested and marketing planned product before the world ever even hears of it.

"Its value stems from how business
leaders, from senior executives to managers, use it to foster new collaborative
behaviors that materially improve business performance."

I would argue that real value stems
from the value your customers/followers derive from the content, not
from how leaders use it. The best written (or more often ghost written)
facebook post or tweet is of no value if no one reads it. To develop a social
media strategy that delivers real value leaders must achieve the hardest part
of the equation - listen (via social media) to what their followers are saying
and build real conversations.

In my world (.com and webdev) i'm asked often by people looking to change careers into this field what they should do with their resume. My response is simple - forget the resume and set out to accomplish something. Build a blog, deploy adsense advertising and learn how to monetize your own traffic. Build a custom twitter page, facebook page, iGoogle theme and then learn how they work together. If this sounds harder than adding a new verb to an existing resume - you're exactly right - and that is the point. Resumes are old school - today I want to see what you can and are accomplishing.

"Why You Still Haven't Gotten a Job" offers advice I used to give when I did job search workshops in the 1990s and it's advice that no longer applies.

I've been out of work for over 2 years. I not only send out reasonably targeted resumes, I won't send out a resume unless I meet at least 60% of the job requirements. I have never landed even a first interview. Just to be on the safe side, I paid to have my resume professionally prepared and even that individual was referred to me by someone I trusted, not a name I found on a Google search. Before I okayed the final version of my resume I sent it to 2 friends and asked them a) did it represent me and b) were there any typos?

A resume is simply a tool to get you the interview, as others have noted, but in this economy, joblessness can be particularly tough for those in middle age, where I am. Lots of highly qualified people are on the market and
aren't getting responses to their resumes or callbacks for
interviews let alone job offers. If you don't get an initial response to the resume, that makes the rest of the advice in this column moot.

I love the concept of 'return on influence' - and I can easily see the application and calculation associated with its metric within a traditional CPG business. My challenge lies in measuring this value for non profits and public utilities - neither of which have measurable online related revenue. Most utilities are scored by their local authority on things like customer satisfaction and trust - however attaching a number to this (and attaching a direct association with socially generated traffic) is hard...

I spent years flying from bos to lhr and finally figured out the trick was to take the sunday morning flight - arrive lhr ~7pm local time. Hotel Hoppa shuttle to the sheraton - and then take in a quick swim in their indoor pool before walking around the corner to the (well away from the airport hubbub) local pub for a pint and quiet meal. For me the trade off between losing a day in transit vs. arriving at my monday meeting relaxed and refreshed was well worth it. It is easy to lose sight of the importance of rest and decompress time during biz travel. Thanks for the great reminder.

Excellent set of questions - now where is the follow up article with answers? I'm currently struggling with the issue of partners - and the fear of being subsumed by a larger organization. Part of what drove me to set out on my own and create LogsItAll was the desire to control my own destiny and create an environment where I could take risks, make decisions and develop strategies quickly and without the overhead that comes with a larger organization. As I contemplate a partnership offer currently on the table I find myself struggling with the emotional attachment to freedom as much as the details surrounding IP and dilution issues. I'd love to hear more on this issue - and how to analyze the relative strengths and weaknesses of an offer - devoid of almost "parental" attachment I have to my little creation...

Ah, if I only had a nickle for every time I read an article preaching the gospel of meaning over money I could afford to be a writer for a living. In my humble experience it is far easier to write from Mr. Taylor's point of view when you have had the opportunity for a superior education and are the beneficiary of that magic combination of luck+ability+timing. For the rest of us, life tends to be a long hard uphill battle that requires considerable suffering. While I agree with the premise, I suspect that the majority of the world are left agog at the concept of having anything approaching a choice.

"Someone once said that there are no small worries for people with big
ambition, since every obstacle on the road to goals looms large." resonates with me loud and clear. Every set back I encounter with my dreams of moving my little start up forward seems like the end of the road - until I manage to get past it. While I can certainly agree with the strategies listed above - internalizing them and actually changing my cognitive process will probably take more than a quick read of an online HBR article...

I have for some time been comparing the house price bubble with higher ed cost bubble. Both are driven by unrealistic expectations - on the part of the borrower and (in most cases) the lender. Both are fueled by easy access to credit. Both are unsustainable.

I haven't seen anyone point to a specific event that precipitated the decline of the housing market - but in the case of the education cost bubble i believe articles like the recent huff post piece by John Hrabe (http://www.huffingtonpost.com/... could well begin to substantially impact the willingness of both students and parents to pay exorbitant prices for a fancy school degree. What happens next will be anyone's guess.

As for MBA programs specifically - the time I spent studying accounting, expert systems and endless case studies (contact lenses for chickens?) were interesting - but looking back some 15 years post graduation the two most valuable experience were my coop placement with Polaroid and a course simply titled "The CEO". Both allowed me to learn from the real world experiences of leaders in their fields. Both exposed me to professionals that represented who and what I wanted to become. The other course work could have just as easily been taken online.

My advice to others? First and foremost - try to get someone else to pay for your MBA. If the cost isn't on you, then justifying the ROI becomes easier... Secondly - be sure there is a strong real world learning component - and be sure that you understand exactly how much you will end up owing and exactly what your salary increase will have to be to justify cover your increased overhead.

-bill

ps. love the idea of free up front MBA programs with a salary rider (Niraj comment). Very clever. Probably not feasible but very clever.

I am said "boot strap" entrepreneur - and i couldn't agree more about our concentration on profitability. From where I sit I'm flat out amazed at businesses like twitter - who's ceo once remarked critically on those who dared ask where their revenue was going to come from.

For me - every penny earned validates our business model and allows me to take one more small step forward. Every new client I value as a cherished partner - and treat them with the care and respect that they deserve. I continue to believe that ultimately this will let my small idea flourish even as those who have the luxury to ignore "profit" fall by the wayside like the grasshopper in winter.

I've got a pretty simple answer to "Why do companies so often spend resources innovating against customer needs that are already well satisfied?" and it boils down to the reason I like working on pull ups (which I'm good at) and hate working on my bench press (which I stink at).

The same skills and abilities that allowed me to become a good climber also allow me to do lots of pull ups. The skills and abilities that produced a company that brilliantly satisfied the need to rapidly query massive volumes of data are also those that support the creation of features like auto complete.

The problem is... I would likely be an even better climber if I developed a more balanced (and far less simian) body. Google may well need to move beyond their comfort zone in order to continue their growth curve as well. Unlike me, Google has the means to hire new bodies to fill in the gaps. I'm stuck with the one I have.

I run a website based around the "freemium" model and pay very close attention to this subject. As a bit of background - in 2010 65% of US internet users indicate that they have paid for internet content. I have also read that roughly 5% of Pandora users "upgrade" their account to the paid premium model.

In building my revenue model I had to factor in the need to build a large community of users (which is easiest to do with a zero cost to join) with my need to generate a profit. This led me to the concept of a "freemium" website where the majority of services are free to all users - with a subset of features available only for a fee. I chose to build the fee threshold based directly on the volume of transactions (for instance, you can log 14 workouts and never see an upgrade invite, however on the 15+ workout you are invited each time to upgrade). In addition, the features that are promoted were designed to appeal to higher volume users.

By experimenting with the volume threshold and the type of upgrade feature set, I've been able to get to a 4% upgrade participation which has proven to support a modest (but scalable) profit.

Lastly - I've found that "corporate" or professional level packages are the real source of revenue. Although the cost to close (and time to close) is much higher than the consumer level sale, a professional account that lets a small business owner tie their payment directly to the revenue that my service can bring them leads to a win win and has begun to generate substantial revenues.

i'm certainly hoping that the human performance data from thousands of users from around the world that i'm capturing with my .com can at some point be turned into gold... the challenge is finding the buyer AND respecting the rights of the original data owners at the same time. I've participated in a few university studies and have found the data sanitizing/anonymizing process to require an interesting balance between user protection and data valuation.

One thing for sure - this article has added a big to do onto my list - write up the data structure/acquisition process just in case i get hit by a bus (or break more than my leg like last week at heavenly).

The question you post is an insightful one - but it begs the follow up - what is the distance between your customers' current state and that new "improved" state that you seek to move them towards. I would posit that this distance can be measured in dollars (cost to change a behavior), difficulty (physical or mental), physical distance and perhaps even more esoteric measures like psychic challenge. The reason for trying to quantify this relates back to classic marketing in that the greater the distance between now and future, the greater the perceived and actual benefit must be to move your audience.

What kind of innovator...this post...? One who things about the behavior changes I'm asking my web users to become.

What change am I asking my users to undertake? Quantify their lives to improve their performance.

the site allows for easy logging for any "human" activity - mostly workouts, but also sleep journal, alcohol consumption, anxiety attacks and many others. Each activity automatically generates progress reports and (for public ones) also creates a performance ranking (show me best 5k runs times for others of my age and gender...)

So taken all together - "Optimize the Human Machine" we felt presented the site as pretty technical and broad.

I run a website devoted to people who like to quantify their (human) performance and then use online tools to seek improvement. After struggling for a long time with mission statements - we came up with "Optimize the human machine".

My problem lies in evaluating the quality of this (and other) short mission statements. Just being short and correctly spelled does not offer much clue as to value. How do you go about comparing various mission statements and choosing the correct one? How often (if ever) should they change? I'm a fan of the concept, but get lost in executional details...

Thanks to some awesome coding by scott i've (almost) got my status update script working... In my case I want my site users to be able to assign permission to my app to perform status updates on their behalf. To that end i've got a function based on /twitter/update_status.asp that should in theory request the saved "twitter_oauth_token" (which is user+application) specific - then pair this with the stored "consumer key" and "consumer secret" that are associated with my app.

Sadly this doesn't work (yet) - as i think there is another session var that needs to be provided for the update to work? My question is - is there a persistent value I can enter for the Session("auth_token_secret") value in my user's profile so that they don't need to 'log into twitter' each time to use the status update?

once again - i'm going to chime in with everyone else - thank you for awesome work. I'm close, but no cigar yet. I have the code installed on my server and have updated the _config file and updated the base.js file per suggestions. I'm finding that the defaul.asp page loads over and over again - with the log into twitter button appearing and dissappearing. any suggestions on where to look? I saw one other post that made reference to this issue, but couldn't see the resolution...

Nice to see a piece that is targeted to those of us actually in the trenches. Strategy and philosophy pieces are nice to read - but advice like "Don't get the fancy gear unless you plan to equip your early colleagues similarly" is wonderfully refreshing!

In my case, I'm a shoe string start up (no VC or angel money for me) so my practical tips are targeted to even smaller entrepreneurs.
*Get an EIN (employee identification number) quick.
*Don't forget to put the copyright tag at the foot of each of your web pages.
*Freshbooks.com is the worlds best (and free at first) time and invoice tracker for start ups who bill for time and/or services.
*Learn to use PayPal (Instant Payment Notification etc.) Yes, you pay to take payments, but having everything come into one account and get connected to one CC is a life saver.
*Set goals and objectives for your self each quarter and year and then stick to them.
*Make some of your goals monetary - some strategic.
*Keep it simple and learn to do it yourself if at all possible.
*Just like parenting, you will probably underestimate the work and suffering... at the same time you will also probably underestimate the joy of your first self earned $$.

i'm a developer and .com founder and was an early tester of the wave platform. From my standpoint there was a distinct lack of two vital ingredients - critical mass and clear user benefits.

In comparison I had the fb social plugins running on my site within a few hours of their public introduction. The fb plugins leveraged an existing critical mass and had a very clear set of site publisher benefits. The fact the deployment was ridiculously easy didn't hurt either...

Well said. I am in full agreement. For those who have real world skills, watching their portfolios for the "bubble-burst" of student debt and likely taxpayer bailout would be wise.
On the whole, the overall topic is almost too enormous for blog discussions. There is real value to gaining the ability for critical thought and systems thinking. With a good curriculum, a student learns to generalize the skills they learn from writing to applied statistics. While I have profound doubts about our current global higher educational institutions, a good programme will elevate a student's skills and abilities. The ROI on this is now in doubt -- for good reasons stated above. This is unlikely to be fixed by a myopic view on higher ed. It starts long before university.

Fantastic article. I have for some time been comparing the "higher education bubble" with the housing bubble. Both were fueled by similar expectations for continuous growth and aggressive lending policies. As going to college came to be viewed a an inalienable right, lenders (with governmental blessings) stepped in to offer loans to all, with no regards or consideration for the underlying value of the degree being sought. Increased demand combined with cheap money led to spiraling college costs.

At some point, buying a $500,000 condo in California is as nonsensical as graduating $160,000 in debt for a liberal arts degree. In working with a few clients in the college lending space, I'm seeing a real backlash on the part of parents who no longer are willing (or even able) to underwrite $20,$30 or $40k/year tuition bills. Instead they are pushing quality community college classes for their children. I truly believe that many of our ivy crusted institutions are heading for a housing bubble type crash if they continue to decouple their tuition costs with the actual value of their degree.

love the analogy of performing musician. my entrepreneurial adventure feels a lot like standing on stage trying to play the mozart clarinet concerto - this sort of constant struggle between convincing yourself that you have what it takes vs. your inner fear of failure. You have to inure yourself against the certain slings and arrows and charge ahead with blind faith. For me, there is always a fine line between delusion and optimism. I'm still not sure where I fall on that spectrum.

Behind every entrepreneur is someone rebelling in someway against the "establishment". They may be vulnerable in some sense (as they are risk-takers), but in a lot of ways they have very thick skins as well. An experienced entrepreneur understands that they re going to face a lot of resistance from a lot of audiences in their life (including personal), but they will also persist, because they believe in themselves or the idea. Winning over audiences becomes a learned skill if they are successful.

It is a lot like being a performing musician. You put yourself out on display and show your musical slant, you may have a lot of anxiety and may face some boos - but if you believe in what you are doing you just brush it off and get on with it (or drug yourself into artificial confidence).

I thought about this over the weekend and realized that I had been in a similar situation in a completely different industry (racing oars for rowing). The decision to fire someone who acts as "heart and soul" can be painful - with the "business case" side arguing in favor of fact based termination, while portraying the side who wants to find an enduring role for the individual as "soft.

The truth is that in an era when brands and businesses are bought and sold, built and marketed and finely crafted from bits, bytes and plastic about the only thing that can't be reproduced are these heart and soul individuals. I believe consumers are increasingly looking for the authenticity that your long time core employee can bring. Want to stave off the competitors in the wings? Find a way for your core employees to continue to add value to the system and to your brand.

In the case of Bob, he is a 61 year old with little chance of finding another position within the industry. My guess is that he is working for love, a structured life schedule and health insurance. Give him an awesome titled "XXXX emeritus" along with a modest work schedule, reduced hours and pay. Put him on the road and use him as the anchor for future presentations and discussions. Losing someone like Bob just makes Powerful even less so.

The example I frequently give of "green hospitality" done right is thehttp://www.golden-arrow.com/ resort in lake placid. At every touchpoint they reinforce their commitment to the environment - from extensive roof top gardens (that capture rainwater and reduce cooling expense) to the flower seed embedded postcards to localvore on the menu each and every aspect consistently tries to err on the side of being good to the surrounding environment. Even though I am not as a rule very sensitive to the green nature of a hotel during my selection process, the Golden Arrow's commitment plus their amenities easily convinced me to choose them over the competition for future stays.

I do not think this could have been better said, every word resonated for me. Imagine the savings if every hotel switched to the master key devices, that alone would be huge. I travel less now but hotels were my home for a long time and I only encountered one authentic green hotel, the ALT in Montreal. They even had two different toilet flushes, the small flush and the big flush.

I've been working on my LogsItAll.com start up now for 4 years and have never once thought of myself as a CEO - rather an underpaid, overworked, frequently delusional web developer. For me the business model quest and resource allocation (my time) trumps all - i'm looking forward to some good advice in future articles- particularly with respect to the difference between optimism and delusion...

i'm a partner in an advertising agency and was recently sent a beautiful collection of prints by the founder of a competing agency as a gift after he learned of my recent marriage. I put a few of them up in my office and was soundly berated by fellow partners for displaying design work done by a competitor. It can be hard to look competition squarely in the eye no matter the industry.

remember playing with magnets as a child? The sudden surprise "snap" of two magnets joining together as opposed to the more expected force of a rubber band stretching highlights part of our fundamental inability to anticipate and process non-linear growth. it is the very nature of "bubbles" that disarm our sense of predictability.

Your description reminds me perfectly of my old neighborhood in east fishkill ny - and our various business / recreation ventures. Now when I visit, the lawns are perfect, but the streets are devoid of children. We live in rural vermont - where i think (to some extent) the culture of invention among children still exists - although I can't seem to make either of my daughters mow the lawn...